i doubt this is the issue (and you might've checked it already), but it might be worth your while to check in the BIOS to make sure that no other audio devices are active (such as the very common Realtek AC97). i mention that because i've run into a couple of instances with an audio device being present both on the mobo and built into the Northbridge at the same time. again, its probably not the issue, but it might be worth looking into.

This crossed my mind as well, so I second giving this a look.

Out of curiosity, what does Windows Update recommend as a driver when you have none installed? One that you have already used mostlikely... but a thought nevertheless.

Speaking of Intel's site, did you use their Intel Driver Update utility? I wonder if you have the most recent chipset driver on the machine as well as their sound driver...